Paduda: Impact of supplier consolidation on workers’ compensation | Workers Compensation News
By Joe Paduda
Tuesday, March 29, 2022 | 0
It’s not good.
This is the main takeaway from Bogdan Savych’s presentation at the recent Workers Compensation Research Institute conference. annual conferenceand many other works I have done on the subject.
Consolidation eliminates competition, although I would say there is little real competition in health care services. (I’ve written extensively about consolidation and its impact.)
There is strong evidence that consolidation actually leads to higher prices, and some research indicates that it leads to lower quality.
So how has health care evolved? Well, primary care physicians have moved from mostly solo practice to being employed by health systems or group practices. Note that this data is from 2018; Consolidation has accelerated since then.
Of course, like everything else in healthcare, it’s local. Orthopedic practices in Wisconsin are much more likely to belong to health systems than those in Delaware.
Savych’s research hit on a crucial question: exactly how many workers’ medicine patients do primary care physicians see? The answer is that most see almost none, with only one in 10 physicians seeing more than 10 WC patients per year. Sure, orthos see more, but still not much; only about a third see more than 10 applicants per year.
There are a whole host of issues with this, which we will address in a future article. For now, the net is that researchers must identify the specific physician responsible for care and outcomes for specific patients, which is extremely difficult, especially when that physician moves from group practice to employment by a system. health. Identifying suppliers is the main challenge, but by no means the only one.
Clientele adjustment – the art of comparing patients with similar diagnoses (often primary, secondary, and tertiary) over time – is equally or nearly as difficult to achieve consistently.
That said, Savych noted that the cost increases are more due to a change in the volume and type of procedures than higher prices for individual services.
The first takeaway (there is MUCH more research and analysis to be done): vertical integration (physician practices being absorbed into health systems) leads to physicians providing more expensive services.
What does this mean for you?
Consolidation increases the medical costs of work compensation. The best way to think about it is on a state-specific basis: understand where there is more consolidation and watch like a hawk the type of services provided to your patients.
Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy workers’ compensation programs. This column is republished with permission from his Managed Care Matters Blog.